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Turnabout Is Fair Play: Court Applies Equitable Estoppel To Prevent Employee From Challenging His Use of FMLA Leave Prior to Meeting Eligbility Requirements

Jason Hearst (Hearst) was hired by Progressive Foam Technologies,
Inc. (Progressive) on March 16, 2006. He suffered a work related
injury on December 3, 2006. On January 3, 2007, Progressive determined
that Hearst was eligible and approved FMLA leave. Hearst took the full
12 weeks of FMLA leave. Thereafter, he remained on leave leave until
his termination on May 1, 2007.

Hearst sued alleging that his
termination violated the FMLA. He argued that, because he was not an
"eligible employee" under the FMLA leave when his leave commenced on
January 3, 2007, none of the leave used between then and March 16, 2007
(his one-year anniversary) can be counted against his 12 weeks of FMLA
leave. As such, he had sufficient leave left over to cover his
remaining absences. The court disagreed.

The court offered two
justifications for its determination. First, the court relied on
regulatory language that the FMLA was "not intended to discourage
employers from adopting or retaining more generous leave policies." 29
CFR 825.700(a). Whether knowingly or in error, the court observed,
Progressive extended FMLA leave to an employee who, statutorily, was
not entitled to it. The FMLA, however, permits an employer to adopt a
more generous leave policy and permit FMLA leave before the employee is
statutorily eligible. The FMLA's twelve month employment provision,
the court observed, was intended to protect employers, not employees.
"In keeping with Congress's intent of permitting more liberal leave
policies, an employer should be permitted to waive the twelve month
work requirement in order to provide an employee the FMLA leave before
the employee is statutorily entitled to the leave." The court
concluded that punishing employers for adopting more generous leave
polices was contrary to the purpose of the FMLA.

The court
also found that equity trumped the employee's position. The court
noted that, typically, equitable estoppel involves an employer
designating an employee's leave as FMLA leave, the employee's reliance
on that designation, and the employer's later argument that the
employee did not qualify for FMLA leave. Here, the court applied
equitable estoppel against Hearst. The court observed:

Just
as an employer is prevented from granting FMLA leave then recanting,
later arguing that the leave was not under the FMLA, an employee, for
the same equitable reasons, cannot take leave -- that all parties
believe to be FMLA leave -- only later to recant this position and
demand twelve additional weeks.

Comment: I
disagree with the court's rationale based on the "more generous leave"
policies language of 825.700(a). To me, the decision confuses
statutory eligibility with employer leave policies. Congress set the
statutory minimum eligibility requirement for FMLA leave at 12 months
of employment. The FMLA does not authorize an employer to modify that
statutory language at will. What it allows is an employer to provide
more generous leave benefits as a matter of policy. An employer could,
therefore, waive the 12-month eligibility requirement as a matter of
company policy. As such, the employee may enjoy FMLA-like protections
and benefits prior to reaching the statutory 12-month FMLA minimum.
But such rights are enjoyed as a product of the employer's policy, not
statutory FMLA.

The equitable estoppel argument is more
intriguing. Estoppel precludes a person from asserting a fact or a
right, or prevents one from denying a fact. It protects one party from
being harmed by another's voluntary conduct, whether by action,
silence, acquiescence, or concealment of facts. It is not at all clear
to me that equitable estoppel should apply in this situation.

The
FMLA requires employers, not employees, to know what they are doing in
terms of the requirements of the law, including whether an employee is
eligible for FMLA leave. Many cases have held that employee's may
assert their FMLA rights even though they are not required to know that
the FMLA even exists. The reason for this is simple: because employer's
are required to know FMLA rights and responsibilities, not employees.

In that context, it is a bit of a stretch, at least for me, to
argue that because Hearst took FMLA leave based on Progressive's
erroneous determination that he was eligible and that it was
designating the leave as FMLA, that somehow his acting on Progressive's
erroneous determination and representations gave rise to a detrimental
reliance claim on the part of Progressive. The decision does not
reflect that Hearst knew or should have known that he did not meet the
statutory eligibility requirements for FMLA leave. Had Progressive
properly done its job in the first instance the leave would not have
been covered by the FMLA. I don't see how it is equitable to prevent
Hearst from correctly asserting his FMLA rights wholly based on
Progressive's failure to do so in the first place.

My opinion notwithstanding, the decision remains available for use by employers.